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Informist, Tuesday, Dec. 23, 2025

By J. Navya Sruthi

MUMBAI – Yields on corporate bonds rose by two to three basis points in the secondary market Tuesday tracking the rise in government bond yields, market participants said. Both mutual funds and banks continued to sell bonds in three- and five-year tenors which also added to the rally so far. However, yields on 10-year bonds were largely steady from the previous day due to lack of fresh cues. 

"Although (yields on) gilts were down end of the day, but during the session yields fell which was followed here," a research analyst at LKP Securities said. Yields on government bonds were higher during the first-half of Tuesday following Monday's momentum. On Monday, yields on the 10-year benchmark, 6.48%, 2035 gilt rose to 6.70% earlier in the day, its highest since Mar. 10 due to lack of an announcement about another open-market operations auction.  

However, yields on government bonds started to fall towards the end of Tuesday as traders covered short bets. Post-market hours, the Reserve Bank of India also announnced that it will buy INR 2 trillion of government bonds through open market operation auctions in four tranches across December and January. The central bank also announced dollar-rupee buy-sell swap auction of $10 billion for a tenor of three years. 

"OMO announcement will weigh on yields, mostly mid-term (two-five year papers) and short-term papers (certificate of deposits and commericial paper). We can see yields falling by at least by two to three basis points tomorrow (Wednesday). We can see impact in tomorrow's (Wednesday) early session itself," the analyst said.     

Deals aggregating to INR 102.59 billion were recorded on the National Stock Exchange and BSE combined, against INR 91.93 billion Monday. Paper issued by National Bank For Agriculture And Rural Development, Navi Finserv, UGRO Capital, Small Industries Development Bank of India, Earlysalary Services, Andhra Pradesh State Beverages, Vivriti Capital, IIFL Samasta Finance, IIFL Finance, Sundaram Finance, Krazybee Services, and Muthoot Microfin were traded the most on the bourses. 

In the primary market, companies were scheduled to issue bonds worth over INR 186.72 billion, over 16 times higher than INR 11.25 billion Monday. However, Power Finance Corp. scrapped issuance of bonds worth INR 60 billion, 32% of the total bonds issuances for Tuesday, due to higher coupon at the time of bidding. Bank of India raised INR 100 billion through 10-year infrastructure bonds and set coupon at 7.23% which was in line with the market's expectation. Dealers said held-to-maturity participants were active in Bank of India issuance.    

Issuances totalling INR 15.40 billion are scheduled for Wednesday. Aditya Birla Capital will raise INR 1 billion by reissuing bonds maturing on Feb. 14, 2028. Avanti Finanace, Gaursons India, Asirvad Micro Finance and NJ Capital will also raise funds on Wednesday.   

UDAY BONDS

In the secondary market, three Ujwal DISCOM Assurance Yojana bond of INR 12.50 million was traded Tuesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 6.40 million of Tamil Nadu's 7.74%, 2032 bond was dealt at a weighted average yield of 7.2471%

* INR 3.00 million of Andhra Pradesh's 7.35%, 2030 bond was dealt at a weighted average yield of 7.2165%

* INR 2.00 million of Uttar Pradesh's 8.45%, 2029 bond was dealt at a weighted average yield of 6.4167%

* INR 1.10 million of Tamil Nadu's 7.75%, 2032 bond was dealt at a weighted average yield of 7.1797%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Akul Nishant Akhoury

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